Question

this is requirement one

this is requirement 2

this is requirement 3

this is requirement 4

please answer all that you can. i really need help

1 2 Knockoffs Unlimited, a nationwide distributor of low-cost imitation designer necklaces, has an exclusive franchise on the distribution of the necklaces, and sales have grown so rapidly over the past few years that it has become necessary to add new members to the management team. To date, the company's budgeting practices have been inferior, and, at times, the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are anxious to make a favourable impression on the president and have assembled the information below. 3 4 5 6 7 8 The necklaces are sold to retailers for $10 each. Recent and forecasted sales in units are as 10 follows: 11 12 13 January (actual) February (actual) (actual) 29,000 June 68,000 July 14 44,000 48,000 46,000 43,000 57,000 83,000 March August September 15 April 16 17 May 117,000 18 The large buildup in sales before and during May is due to Mother's Day. Ending inventories should be equal to 40% of the next month's sales in units. 19 20 21 The necklaces cost the company $4 each. Purchases are paid for as follows: 50% in the month of purchase and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a month's sales are collected by month-end. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. 22 23 24 25 26 27 28 The company's monthly selling and administrative expenses are given below: 29 30 Variable: 31 Sales commissions 4% of sales Fixed: 32 33 Advertising 254,000 34 Rent 27,000 Wages and salaries Utilities 35 127,600 36 14,200 37 Insurance 6,600 $ 38 Depreciation 32,000 39 40 41 42 1 Re All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $23,200 in new equipment during May and $58,000 in new 2 Pre 3 Inc 4 1. equipment during June; both purchases will be paid in cash. The company declares dividends of $18,600 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below: 6 7 8 Assets 10 Cash 92,000 Accounts receivable ($44,000 February sales; $456,000 March sales) 11 500,000 12 13 Inventory Prepaid insurance 132,800 46,200 14 15 Fixed assets net of depreciation Total assets 1,040,000 1,811,000 16 17 Liabilities and Shareholders' Equity 18 19 Accounts payable Dividends payable 134,800 20 18,600 Common shares 21 980,000 677.600 1,811,000 Retained earnings Total liabilities and shareholders' equity 22 23 2. 24 The company wants a minimum ending cash balance each month of $50,000. All borrowing is done at the beginning of the month, with any repaymeents made at the end of the month. The interest rate on these loans is 1 % per month and must be paid at the end of each month based on the outstanding loan balance for that month 25 26 27 28 29 30 3. 31 32 33 34 Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: 1. a.A sales budget by month and in total. b.A schedule of expected cash collections from sales, by month and in total. c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total d.A schedule of expected cash disbursements for merchandise purchases, by month and in total 2.A cash budget. Show the budget by month and in total. (Round your intermediate calculations and final answers to the nearest whole dollar. Also, round down your interest calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicated by a minus sign.) 3.A budgeted income statement for the three-month period ending June 30. Use the variable costing approach. 4. A budgeted balance sheet as of June 30. Schedule of Expected Cash Collections April 12 13 May June Quarter 14 February sales 15 March sales 16 April sales May sales 17 June sales 18 $ $ Total cash collections $ 19 20 21 A merchandise purchases budget in units and in dollars. Show the budget by month and in total. 22 KNOCKOFFS UNLIMITED Merchandise Purchases Budget April 23 24 May June Quarter 268,000 Budgeted sales in units Add: Budgeted ending inventory 25 0 26 268,000 27 Total needs 28 Less: Beginning inventory Required unit purchases 29 0 0 268,000 $4 $4 $4 $4 30 Unit cost 31 Required dollar purchases 32 A schedule of expected cash disbursements for merchandise pruchases, by month and in total 33 34 KNOCKOFFS UNLIMITED 35 Schedule of Expected Cash Disbursements 36 May Quarter April June $ 37 March purchases April purchases May purchases June purchases 38 39 40 $ $ $ $ 41 Total cash disbursements Req. 2: 3 A cash budget. Show the budget by month and in total. (Round your intermediate calculations and final answers 4 to the nearest whole dollar. Also, round down your interest calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicated by a minus sign.) 5 6 7 KNOCKOFFS UNLIMITED Cash Budget For the Three Months Ending June 30 10 April May June Quarter Cash balance, beginning Add receipts from customers 11 12 Total cash available Less disbursements: 13 14 Purchase of inventory Advertising 15 16 17 Rent Salaries and wages 18 Sales commissions 19 20 Utilities 21 Dividends paid Equipment purchases Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings 22 23 24 25 26 27 Repayments Interest Total financing 28 29 Cash balance, ending 30 31 32 3.a A budgeted income stateent for the three-month period ending June 30. Use the varialbe costing approch 3 4 OCKOFFS UNLIMITED 6 Budgeted Income Statement 7 For the Three Months Ended June 30 Sales revenue Variable expenses: Cost of goods sold 10 11 Commissions 12 Contribution margin Fixed expenses: Advertising 15 Rent 16 Wages and salaries Utilities Insurance Depreciation Operating income Less interest expense Income before tax 23 348789822 A budgeted balance sheet as of June 30: 3 Req. 4: 4 KOFFS UNLIMITED Budgeted Balance Sheet 7 30-Jun 8 Assets Cash 9 Accounts receivable 10 11 Inventory Prepaid insurance Fixed assets, net of depreciation 12 13 $ Total assets 14 15 Liabilities and Shareholders' Equity 16 Accounts payable, purchases Dividends payable 17 18 Common shares 19 Retained earnings 20 Total liabilities and stockholders' equity $ 21

Answer 1

Sales Budget April May June Quarter Budgeted Unit Sales Selling Price per unit 83000 117000 68000 268000 10.00 10.00 10.00 10.00 Total Sales 830000 1170000 680000 2680000 Knockoffs Un lim ited Schedule of Expected Cash Collections April May June Quarter February Sales March Sales 44000 44000 399000 57000 456000 April Sales May Sales 166000 83000 581000 830000 234000 819000 1053000 June Sales 136000 136000 Total Cash Collections 609000 872000 1038000 2519000

Knockoffs Unlimited Merchandise Purchases Budget April May June Quarter Budgeted Unit Sales Add: desired E nd ing Inventory Inventory 83000 117000 68000 268000 46800 27200 19200 19200 Total Needs 87200 129800 144200 287200 Less: Beginning Merchandise Inventory Required Purcha ses 33200 46800 27200 33200 97400 60000 254000 96600 Unit Cost 4.00 4.00 4.00 4.00 Required Dollar Purchases 386400 240000 1016000 389600 Knockoffs Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts Payable April Purchases May Purchases 134800 134800 193200 193200 386400 194800 194800 389600 June Purchases 120000 120000 Total Cash Payments 328000 388000 314800 1030800

Knockoffs Unlimited Cash Budget April May June Quarter Beginning Ca sh Balance Add: Collection from Customers 50400 92000 50600 92000 609000 872000 1038000 2519000 Total Cash Available 701000 922400 2611000 1088600 Less: Cash Disbursements Merchandise Purchases 388000 1030800 328000 314800 Advertising 254000 254000 254000 762000 Rent 27000 27000 27000 81000 Salaries 127600 127600 127600 382800 46800 Comm sions 33200 7200 0 Utilities 14200 14200 14200 42600 Equipment Purchases Dividend Paid 0 23200 58000 81200 18600 18600 Total Cash Disbursements 802600 880800 822800 2506200 Excess of Cash Available Over Disbursements 41600 -101600 265800 104800 Financing: Borrowings Repayments 152000 9000 161000 0 0 -161000 -161000 Interest 0 0 -4740 4740 Total Financing Ending Cash Ba lance Interest $152,000 1 % 3 +$9,000 1 % * 2 = $4,740 -165740 152000 9000 4740 100060 50400 50600 100060

Knockoffs Unl im ited Budgeted Income Statement For the Three Months ended June 30 Sales 2680000 Less: Variable expenses Cost of goods sold Sales commission Contribution margin Less: Fixed expenses |Advertising 1072000 107200 1179200 1500800 762000 Rent 81000 Salaries 382800 Utilities 42600 Insurance 19800 Depreciation Net Operating income Interest Expense Net income 96000 1384200 116600 4740 111860

Knockoffs Unlimited Budgeted Balance Sheet June 30 Assets Cash |Accounts Receivable (May sales $117,000; June sales $544,000) Inventory Prepaid insurance Property, plant and equipment (net) Totalassets 100060 661000 76800 26400 1025200 1889460 Liabilities and Stockholders' Equity Accounts payable Dividends payable Common Stock Retained earnings Totalliabilities and stockholder's equity 120000 18600 980000 770860 1889460